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Title: Scam Response not Cohesive

Thursday 20 April 2023

 
The conduct regulator calls for a cohesive approach across industry to tackle the rise in scams in Australia. 

The Australian Securities and Investments Commission’s  (ASIC) report titled Report 761 Scam Prevention, detection and response by the four major banks state that there were $550 million in losses due to scams. 

ASIC Deputy Chair Sarah Court said in an official statement,“Our review found inconsistent experiences and outcomes for customers who were the victim of a scam, and in some cases a bank's response may contribute to further distress for a customer."

The conduct regulator found that the financial sectors' response to an incident needed to be more consistent, there needed to be more consistency and clarity around questions of liability, Banks did not always support customers, and there were inconsistencies around the detection and mitigation.

Just last month, the Australian Competition and Consumer Commission (ACCC) Scamwatch  Report indicated a rise in bank impersonation scams, with over 14 thousand reported scams resulting in $20 million in losses. 

Scams are a rising challenge in Australia.

In response to tackling the high-risk financial scams, the Commonwealth Bank of Australia and Telstra announced a partnership to build a Scam Indicator. 
The regulator highlighted some further observations  from the report:
  • bank customers are overwhelmingly the bearer of scam losses, accounting for 96% of total scam losses across the banks,
  • collectively, the banks detected and stopped a low proportion of scam payments made by their customers (approximately 13% of scam payments),
  • the reimbursement and/or compensation rate varied but was low across the individual banks, ranging from 2 to 5%,
  • customers who made a complaint were more likely to receive some form of compensation payment from their bank, compared to customers who did not, and
  • across three banks for which data was available, reimbursement and/or compensation was paid in only around 11% of the cases where there was a scam loss.
The Deputy chair continued, “ASIC expects that this review will aid banking and other financial service businesses, telecommunication providers, digital platforms and other organisations in developing consumer-focussed scams management practices and strategies.”
 
Join the conversation in at GRC Institute's Fraud and Scams Discussion Group.

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